Fenty Proposes Job Cuts, Tapping Agency Revenues
Friday, October 3, 2008
D.C. Mayor Adrian M. Fenty is proposing to eliminate 400 vacant government jobs, postpone a retirement benefits package for city employees and use accrued revenue in the bank accounts of city agencies to help close a $131 million budget gap, sources said last night.
The mayor's package, developed over the past week, cobbles together spending cuts and revenue enhancements, including several that might prove politically contentious. However, the proposal contains no tax increases, said the government sources, who spoke on condition of anonymity because the D.C. Council will not be briefed until Monday. The council must vote on budget changes.
The proposed revisions to the fiscal 2009 budget come after Chief Financial Officer Natwar M. Gandhi announced last week that the city's projected revenue had dipped by 2.5 percent because of the financial meltdown. The District's overall budget includes $5.4 billion in local funds.
Under Fenty's package, the city would save $31 million by eliminating 400 vacant jobs, reductions that would be spread across most agencies, except for schools. For example, the police and health departments would lose a few dozen positions, but there would be no reduction in the number of police officers, the sources said.
This marks the second time in a year that Fenty (D) has eliminated vacancies; he cut 650 positions in the spring while preparing his initial budget package.
Fenty will propose saving $10 million by delaying a planned investment in retirement benefits for city employees. He also wants to take $35 million from the bank accounts of agencies that collect revenue from outside sources, such as the Department of Consumer and Regulatory Affairs, which sells business licenses. And the mayor proposed using $17 million that is projected to be left over from fiscal 2008 to help plug the gap. Sources said Gandhi is wary about using that revenue before it is certified in the city's annual fiscal audit in February.
Two other proposals will probably draw council objections.
Fenty has sought for months to change vendors for the D.C. Lottery, but the council has balked. The mayor has attached the change of vendors to his revised budget package, saying a new lottery company will save the city $5 million a year, the government sources said.
Furthermore, Fenty and council member Phil Mendelson (D-At Large) have been at odds over the future of a vacant building that the city leases at 225 Virginia Ave. SE. The building was supposed to be used as a police division headquarters. Fenty wants to get rid of the $6 million-a-year lease.